Health Reforms Could Help Calif. Prison Spending

SACRAMENTO (AP) — California could gain tens of millions of dollars annually in federal reimbursements for prison health care under the nation’s new health law, state and federal officials said Tuesday.

The money would come from Medicaid reimbursements for inmates who are treated in outside hospitals. It would not help pay for health care within prisons.

A nationwide study of prison health care spending released by The Pew Charitable Trusts cites an estimate from California’s nonpartisan Legislative Analyst’s Office that the state could save nearly $70 million annually.

The study assumes that California will take full advantage of a change in federal law that will make Medicaid coverage available to low-income childless adults, meaning more prisoners will be eligible. States can also get a higher reimbursement rate for newly enrolled inmates.

The federal court-appointed official who controls California’s prison medical system uses a more conservative projection of $40 million in savings. The state Department of Finance projects $20 million in additional annual reimbursements for inmates through Medi-Cal, which is California’s Medicaid program, and through California’s Low Income Health Program.

The lower estimates are partly because California already was seeking reimbursement for some inmates and because it is sending fewer inmates to outside hospitals. The state recently opened an $839 million medical facility in Stockton to treat seriously ill inmates.

The projected savings would be a fraction of the nearly $9 billion the state spends on the prison system, of which more than $2 billion goes for inmates’ medical, mental health and dental care.

The federal receiver’s office collected $37 million in Medicaid reimbursement last fiscal year under the current 50 percent reimbursement rate. It projects the state will collect $40 million during the current fiscal year, even as the rate for those newly enrolled in Medicaid temporarily increases to 100 percent under the nation’s new health insurance system.

“This is like new money coming into the state of California,” said Joyce Hayhoe, a spokeswoman for the federal receiver. “We were getting zero reimbursement before.”

The legislative analyst’s higher estimate, used in the Pew report, dates from February and relies on 2-year-old data on inpatient costs. Aaron Edwards, one of the authors of the study, said it used the best available information at the time.